Week Ahead Figure 1

Yellen noted that “with inflation continuing to run below the Committee's 2 percent longer-run objective, the FOMC (…) intends to carefully monitor actual and expected progress toward our symmetric inflation goal.” The testimony signaled a gradual pace of policy normalisation. Indeed, today’s release of US CPI for June disappointed expectations, with core CPI decelerating to 1.7% y/y, the lowest since January 2015.  The rand appreciated by over 2% since Monday to 13.03/USD presently, realising the second best weekly spot returns out of 24 emerging market currencies. 

The rand is expected to trade in a range of R13.55/USD – R12.55/USD, R15.40/EUR - R14.40/EUR and R17.45/GBP - R16.45/GBP.  

Week Ahead Figure 2